Category: Jordan

You probably thought that you would not live long enough to hear of a nation in the Middle East complain of not having enough oil to supply its population. Well, this is exactly what the Kingdom of Jordan in the Middle East is facing today.

Unlike many other Arab states and Kingdoms in the Middle East, Jordan does not have its own natural source of oil. It therefore imports natural gas and heavy oil from Egypt. However, supplies from Egypt were recently disrupted following an attack on the Arab Gas Pipeline that occurred last month. This attack marked the second Sinai explosion in a period of one month. According to officials in Cairo, the repairs will take between 7 and 10 days to complete.

This however, is unacceptable for Jordan, which relies on Egyptâ€™s natural gas and heavy oil supplies for 80% of its energy production. The Kingdom reports having experienced a loss of up to JD637 million in the first half of this year as a result of the continuous disruptions in the supply of oil from Egypt. The Kingdom is currently purchasing oil from the international market at a cost of more than $3 million per day.

The current high cost of fuel in the international market and the continuous disruptions in oil supplies has led officials from Amman to seek alternative sources of energy. Although the Kingdom is set to receive oil from neighboring Iraq at an $88 per tonne discount, the Kingdom officials still continue to seek alternative sources of energy that are more reliable and pocket friendly.

This is good news for various energy firms around the globe. Plans are underway for the construction of an offshore terminal for liquefied gas at the Port of Aqaba. Construction is set to begin in 2013 and various international firms have expressed interest in the project including Royal Dutch Shell, Al Fijr, Lemont/General Electric and British Petroleum. If all goes according to plan, the Kingdom would greatly reduce its current 30 000 tonnes a day consumption of heavy oil.

The countryâ€™s switch to alternative power will also see a reduction in government spending. Jordan currently spends one-fifth of its gross domestic product on the importation of energy to meet the nationâ€™s needs. The country currently imports 97% of its energy. Amman officials are also exploring energy sources such as nuclear power, wind, solar and oil shale.